One of the main problems associated with the administration of superannuation and similar funds is that a multiplicity of relatively small contributions from investors need to be directed accurately into a corresponding multiplicity of investor accounts on a regular and ongoing basis. Typically, a responsible officer within an organisation, eg a payroll officer, provides a single payment to the superannuation fund administrator along with details of how the payment is to be split amongst the individual superannuation accounts of the employees of the organisation. A large number of mismatches typically exist, due to regular changes occurring to the details of both the individual investors and their accounts. Superannuation fund administrators have traditionally accepted the onerous responsibility of resolving these issues as one of the costs associated with the overall benefit of being the default funds manager.
In some cases superannuation fund administrators have initiated electronic services to assist in their submission of contribution files. Some allow contribution files containing detailed transaction instructions simply to be emailed in a specified format. Others have begun to develop more sophisticated internet-based systems which provide a “web form” for use by the employer to make contribution data entries. Generally, third party applications are utilised, with the result that they are not integrated closely with core computer systems that support superannuation fund administration. Current implementations of these systems are also prone to error such as investor duplication and error handling by exception reporting and manual resolution processes. Whilst these represent an improvement over a manual off-line approach, the superannuation administrator ultimately bears responsibility for resolving these issues once the file has been accepted.
In addition, the manner in which the reconciliation process occurs may itself tend to negatively affect the integrity of the data being reconciled.